Artificial Intelligence & Machine Learning in Finance | Prophix

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“Companies who adopt AI early will have an unfair advantage over the competition. Catching up later will become increasingly difficult as the business learnings (of using the technology) are applied and company thinking evolves.” -Oliver Christie, Artificial Intelligence Consultant & Speaker

What does A.I. stand for? The easy answer is artificial intelligence, of course. But there’s nothing artificial about intelligence that could help your office of finance be more proactive, make better predictions, and take on a leadership role in your organization. Researchers estimate that AI could automate repetitive tasks that eat up a third of finance managers’ time, freeing them to work on more strategic operations.

Machine learning and AI are coming to finance — in fact, they’re already here. The ability to use these tools effectively can:

Spark Amazing Innovation,

Help Accelerate Insights, and

Make your department Absolutely Indispensable.

To create this guide, we pulled in expert advice on finance, AI, and the combination of the two. Read on to find out how AI and machine learning will change finance in the days to come — and how you can get started right now.

of business leaders say AI will give them a business advantage in the future

How much Netflix estimates they saved with their machine learning algorithm in 2017

of executives believe AI boosts productivity

Artificial Intelligence in Finance: The Current State of the Art

AI has already made inroads into many industries. But the office of finance is already proving to be an early adopter and ripe for disruption. The ability to analyze data, calculate risks and quickly inform decision-making is crucial to finance’s role in the organization. Finance runs on data. Historically, finance leaders have had to pour through data in time-consuming ways. There’s immense value to be had in automating planning, budgeting, forecasting and reporting.

Automation is only the first step in bringing AI to finance, however. Having artificial intelligence analyze data is the next step. Modern software solutions can already keep track of a vast amount of data and present insights. It’s not just financial data, either – everything from social media monitoring to customer feedback can play a role in guiding decision-making.

Here are just a few ways that AI has already begun to fuel the next evolution of finance.

With the right platform, finance leaders can get data from multiple sources without diving into spreadsheets.

An automated invoice process can consolidate multiple orders, handle different invoice systems and formats, and even fill in missing information.

According to the Global Business Travel Association, nearly 1 in 5 expense reports have errors. AI can identify and flag potentially erroneous reports.

Automation streamlines the process and makes it more convenient for everyone involved, while collecting data to generate insights.

Testimonials

"We’ve got a vastly superior forecasting process. We’re able to drill down and support forecast numbers in much more detail, and therefore, hold people accountable – ask the right questions at the right time. It’s a huge quantum leap for our business in terms of how we can get better insights into where the business is going"

Solarcentury Tony Crawte, Group Financial Controller

Machine Learning in Finance: Emerging Trends

The process by which an AI gets better at tasks is called machine learning. Rather than being programmed for a specific task, a machine learning system processes data, analyzes the outcome, and adapts its own algorithms with minimal human intervention. Machine learning requires humans to clean and tag data sets, and then to evaluate the output and make adjustments to the algorithm. The next phase of machine learning, known as “deep learning,” involves AI learning through layers of datasets, making its own optimization and adjustments.

Here’s what is just over the horizon for AI trained through machine learning:

Always-On Closing:Rather than running monthly or quarterly reports, AI trained through machine learning could continuously run reports and deliver insights

Single Source of Data Truth:AI-powered software can consolidate disparate sources of data, verifying and sanity-checking it to create a single reference point for the entire organization.

Future-Focused Planning:In the near future, finance leaders will be able to make recommendations based on trends identified by AI.

“In the office of finance…Machine Learning has been used for optimisation and prediction using different algorithmic structures. Given the high volume of accurate records and quantitative nature of finance, [it] has proven a very useful tool to deliver better decision making tools and improve predictions on cashflow.” -Clara Durodié, AI Technology Strategist, Chair of Cognitive Finance Group

The Virtual Assistant: AI, Natural Language Processing, & Finance

Right now, working with AI can be complicated. But the interfaces that drive human interaction with the software are growing simpler over time as the technology evolves. AI chatbots, once used primarily for customer service, are beginning to help CFOs and other finance professionals interact with the software in a more natural way. Apps like Slack can host chatbots that are connected to cloud-based AI programs, putting unprecedented analytical power at your fingertips.

The next generation of finance software could be even more hands-free. Imagine the way you talk to Siri, Alexa, or Google Home: These devices are capable of natural language processing. In other words, they speak your language; you don’t have to learn theirs. In the near future, AI will power a fully-functioning virtual finance assistant. Instead of diving into spreadsheets, you could simply say, “Penny, run the second quarter revenue report.”

The end goal is an assistant trained to anticipate your finance office’s needs. You wouldn’t have to ask for reports to be run, or to get the latest insights. Instead, the assistant would analyze data in the background, identify relevant information, and offer it to you proactively.

While the virtual assistant takes on the drudgework, finance leaders will be able to prioritize strategic decision-making that helps guide the future of their organizations. That means AI will actually make your role more relevant, and the office of finance more valuable to the company.

Getting Started with AI for Finance

There are practical AI applications available for finance professionals today, with even more coming in the very near future. Now is the time to prepare for the changes rolling through the office of finance. Here are three ways to start the process:

Automate Tasks. Look for repetitive, time-consuming functions that are done the same way every time. Tasks that require consolidating data from multiple sources — usually a tedious process — are especially ripe for automation. Clear these tasks from your docket and you will have more time for strategic tasks that require human intuition, empathy and intelligence.

“In the future, anything that can be automated, will be.”

-Christopher Penn, Co-Founder & Chief Innovator, BrainTrust Insights.

Identify Your Most Valuable Data. A large percentage of data your organization collects will not be useful for generating insight. Focus on the data that holds the most value; data that is worth long-term storage and in-depth analysis.

Develop Data Analysis Skills. It’s a good idea to invest in developing stronger data analytics skills throughout your team, whether through informal instruction or online coursework through a site like Lynda.com.

“Accounting and finance technology are no longer just systems to handle debits and credits. As accounting standards change and the demand for better financial insight increases, you must incorporate technology to maintain and improve your relevancy and efficiency.”

-Ben Murray, VP and CFO, Cartegraph

AI and Human Intelligence in Finance

Perhaps the most intelligent way to prepare for AI in finance is to embrace the change, rather than fear it. The office of finance will not be automated out of existence; quite the contrary. AI will make the office of finance even more valuable to the organization. The virtual finance assistant can handle operational tasks, while a properly prepared and equipped team can use the insights it produces to guide the organization’s future. Artificial intelligence plus human intelligence can add up to a powerful new role for the finance department.